What to Read in The Hindu Editorial( Topic and Syllabus wise)

Editorial 1: ​​​Navigating the global economic transformation

Context

India and the Global South can join hands to build a fair new economic system for all countries.

Introduction

The world’s economic order is changing fast. The U.S. and China are caught in a major power struggle, each building its own economic network to protect its interests. This global shift is altering trade routes, currency systems, and strategic plans. Yet, within this change lies a rare chance to create a fairer and more balanced world order.

Analysing New Economic Paradigms

1. State–Capital Nexus

• Populist leaders are joining hands with big businesses.
• They give special treatment to a few rich companies that help them hold power.
• Public wealth is traded for private gain, hurting ordinary citizens.
• This weakens the social contract between people and the state.

System Type	Role of Government	Main Beneficiaries	Impact
Laissez-faire capitalism	Limited control	Public and small firms	Fair competition
Populist–autocratic capitalism	Heavy, selective control	Crony capitalists	Rising inequality and corruption

2. Resurgence of Power Politics

• Crony capitalists influence national leaders to revive old-style power games.
• The U.S. is reworking its global strategy to protect its dominance.
• It presses Taiwanto shift chip production, secures Panama routes, and controls rare earth supply in Africa and Central Asia.
• It mixes digital currencyand foreign policy to expand reach.
• Such moves create rival “zones of influence” and spark new conflicts.

U.S. Strategy	Target Region	Purpose
Chip relocation	Taiwan–U.S.	Secure tech supply
Route control	Panama	Protect trade lanes
Resource link	Africa, Central Asia	Access rare minerals
Arctic push	Greenland, Canada	Gain future energy and ecology control

3. Digital Colonialism

• Big Tech and cloud giants reshape economies and influence politics.
• They control data, media, and financial systems.
• This digital power supports populist leaders who restrict digital rights.
• Over 100 central banksare testing digital currencies, which could weaken national independence.

Trend	Example	Key Concern
AI and data laws	AI Action Plan, Cloud Act	Threat to privacy
Financial systems	SWIFT, CBDCs	Weakens sovereignty
Digital monopolies	Big Tech dominance	Limits fair competition

Result:
While digital systems make transactions faster, they also erode economic freedom and transparency, deepening global inequalities.

Opportunity in Crisis

1. Lessons from Global Disruptions

• Economic shocks bring new chances for countries like India and China, which led the world economy for most of history.
• The old model of neoliberal globalisationfocused on profit, cheap labour, and exploiting nature.
• This system created huge debt, reduced funds for welfare, and handed public assets to private elites.
• The result was extreme wealth gaps between the Global Northand the rest of the world.

Old Global Model	Features	Effects
Neoliberal Globalisation	Capital accumulation, cheap labour, trickle-down growth	Massive inequality, debt crises, weak welfare systems

2. Deepening Inequality

• The World Bank’s 2022 reportsays nearly half of the world lives below the $6.85/day poverty line.
• About 735 million peoplestill suffer hunger.
• These harsh conditions create frustration and social divides.
• Populist leaders often use this anger to push undemocratic agendas.

Indicator	Data (2022)	Key Concern
Global poverty	47% of population	Economic exclusion
Hunger	735 million people	Rising instability
Social impact	Decline in trust	Populist politics

3. Building a Fairer Economic Order

• India and the Global South must not acceptan unjust system.
• They can collaborateto design a New Economic Deal that helps all nations.
• India should seek reform of global financial institutionsto ensure fair representation.
• It must also push for debt-relief frameworksto help developing nations regain freedom from unfair conditions.
• Through BRICSand South-South cooperation, India can lead new alliances and promote fair trade.
• To keep relations strong, India should build bipartisan tieswith key partners like the U.S., Bangladesh, and Nepal — not just government-to-government links.

Strategy	Objective	Example
Reform financial systems	Fair representation	IMF and World Bank reform
Debt-relief framework	End structural debt traps	Global South coordination
South-South partnerships	Balanced trade growth	BRICS cooperation
Bipartisan diplomacy	Long-term stability	Wider ties beyond ruling parties

Need for a Recalibration

1. Rethinking India’s Growth Path

• India must make a clear course correction to reach its true potential.
• The private sector helps growth and creates jobs, but it focuses mainly on profit.
• The state must take the leadin key areas like energy, defence, space, health, and education.
• A strong public role ensures security, equal access, and national self-reliance.

Sector	State’s Role	Purpose
Energy & Infrastructure	Build and regulate	Ensure stable growth
Health & Education	Fund and expand	Support every citizen
Defence & Space	Lead and innovate	Strengthen national security
Digital Finance & Data	Govern and protect	Safeguard sovereignty

2. Preventing Corporate Dominance

• India needs strong anti-monopoly lawsto stop a few firms from gaining control.
• Setting up a sovereign wealth fund, like Norway’s, can help manage national savings wisely.
• This fund can invest profits from public assets back into people’s welfare and national goals.
• Redirecting public sector units (PSUs)to act like China’s state-owned enterprises can boost both revenues and global influence.

Reform	Global Example	Benefit
Anti-monopoly laws	EU, U.S.	Fair competition
Sovereign wealth fund	Norway	Invests for public good
PSU redeployment	China	Enhances strategic power

3. Investing in Knowledge and Digital Sovereignty

• India must invest deeply in science, research, and education.
• Giving academic freedomwill make innovation faster and more meaningful.
• The digital-financial systemshould follow constitutional values like equality, justice, and transparency.
• Aligning technology with national goals will protect both citizens’ rights and India’s independence.

Focus Area	Goal	Impact
Scientific research	Drive innovation	Global competitiveness
Education autonomy	Encourage creativity	Skilled youth
Digital finance	Match constitutional aims	Secure, inclusive growth

Conclusion

India stands at a defining crossroads in a rapidly changing world economy. To turn global disruption into opportunity, it must blend state-led vision with inclusive growth. By reforming financial systems, strengthening social foundations, and championing South–South cooperation, India and the Global South can together build a fair, resilient, and balanced global order rooted in justice and shared prosperity.

 

Editorial 2: ​​Evolution, revolution

Context

The Economics Nobel celebrates the power of freedom and the spirit of innovation.

Introduction

The 2025 Nobel Prize in Economic Sciences honours Philippe Aghion, Peter Howitt, and Joel Mokyr for explaining how innovation drives growth through creative destruction. Their work links history, culture, and mathematics to show how progress replaces the old with the new. It also reminds us that innovation depends on both market freedom and state direction.

The 2025 Nobel Prize in Economic Sciences

Understanding the Award

• The 2025 Nobel Prize in Economicswent to Philippe Aghion, Peter Howitt, and Joel Mokyr.
• Together, they explored why human progresshas grown so fast in the last 200 years.
• Joel Mokyrstudied the historical and cultural roots of innovation.
• Aghionand Howitt developed a mathematical model called “creative destruction.”

Economist	Contribution	Focus
Joel Mokyr	Historical and cultural roots of innovation	Long-term progress
Aghion & Howitt	Formalised “creative destruction” model	Mathematical theory of growth

The Idea of Creative Destruction

• The idea comes from Joseph Schumpeter, who saw capitalism as an evolving system.
• He said innovation replaces old technologies and industries— a process that’s both creative and destructive.
• Schumpeter believed this worked best when markets are free, competition is open, and the state only enables, not directs, innovation.
• But history shows that states like the USSR and Chinaalso drove innovation through planning and direction.

Model	Key Belief	Example	Limitation
Schumpeter’s Capitalism	Innovation through free markets	20th-century Western economies	Ignores state’s role
State-led Innovation	Government directs growth	Soviet Union, China	Limits individual freedom

The Endogenous Growth Theory

• In the 1990s, Aghion and Howittrefined Schumpeter’s idea during the rise of neoliberalism.
• Their endogenous growth theorysaid that long-term growth comes from innovation, education, and researchwithin the economy.
• It focused on private competitionand market incentives, not central planning.

Theory	Core Driver	Outcome
Endogenous Growth	Innovation, research, education	Self-sustained growth
Exogenous Growth	External factors (like aid, population)	Short-term growth only

Challenges to the Model Today

• The Nobel came at a time when these ideas face new challenges.
• Under Donald Trump, the U.S. turned protectionist, politicised science and trade, and reduced global openness.
• The model fits neoliberal capitalismbut fails to explain state-led innovations in China’s economy.
• It also overlooks how geopolitics, inequality, and weak institutionsaffect innovation.

Issue	Example	Effect
Trade weaponisation	U.S.–China trade war	Disrupts global innovation chains
Inequality	Wealth gaps in Global North	Limits creative participation
Institutional control	State dominance in China	Challenges free-market models

The Nobel’s Deeper Message

• The award is also a warning to liberal democracies.
• The ideals of open markets, scientific freedom, and institutional independenceare weakening.
• To keep innovation alive, nations must protect freedomswithin a state-enabled, inclusive capitalism.

Principle	Needed Action	Purpose
Openness	Encourage free ideas and trade	Boost creativity
Freedom of research	Protect science from politics	Sustain innovation
Balanced capitalism	Combine state guidance with liberty	Ensure fair growth

Conclusion

The Nobel recognition celebrates the power of innovation, yet warns that its foundations are weakening. As trade wars, protectionism, and state control reshape economies, nations must find balance. True progress demands free inquiry, fair competition, and inclusive growth. Only by blending state guidance with institutional freedom can the world sustain the creative energy that fuels human advancement.